As California’s drought wears on, state and federal regulators will be under increasing pressure to loosen environmental standards that protect native fish and other wildlife. Relaxing flow standards in rivers and streams is always problematic; the standards exist because many native species are already in a precarious condition. But during droughts, regulators often make this decision as part of a balancing act, in order to make additional water available to cities and farms. Usually, the standards are relaxed without requiring any payment from cities or growers for the added water they receive. Yet the environmental consequences of relaxing standards can be costly, requiring special efforts to protect and recover species in other ways—such as with conservation hatcheries that help maintain populations of endangered species outside of their natural environment.

In a recent op ed in the Sacramento Bee, we joined a group of researchers from UC Davis, UC Hastings, and Stanford University to propose a new way for California to approach this challenge. The basic idea: instead of giving the water away, California should create a special environmental water market to sell to growers and cities the water made available by relaxing environmental standards. The revenues would be used to support fish and wildlife recovery. This special environmental market would be an extension of the water trading that already happens during droughts. It would help meet California’s goals of both ensuring reliable water supplies and protecting the environment, even during the dry times.